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An NBDA Publication April 1, 2007 Vol. 16, Number 5 Santa Fe Shops Defy Traditional Sales Models Specialty Bike, BY MATT WIEBE meticulous, individualized service and small retailers in the past few months. SANTA FE, NM—Fewer bike brands component advice—your shops have Frank Sotomayor opened Frankie Flats, Sports Chains that control a growing share of the arrived. which focuses on service, and David market and fewer shops in business “I see myself as brokering artistic Meredith opened One Ghost to focus Deliver Dollars that support fewer suppliers are classic bike parts to my customers,” said David on downhill jump bikes. examples of industry consolidation. Bell with tongue fi rmly in cheek. Bell But Santa Fe, a city of 70,000 resi- BY MATT WIEBE But swimming against this current is owns Mellow Velo in Santa Fe, New dents, is also home to three large tra- Success in the bike business in 2006 a new wave of retailers that are develop- Mexico. ditional bike shops. When added to the depended on which chan- ing niche businesses to serve customers Customers who walk into Bell’s 500- three above—that’s one bike shop per nel of trade you did falling through the cracks of traditional square-foot shop can choose from rims 11,667 people. your business in. generalist bike shops. in 13 colors, and track cogs polished to What’s happening in Santa Fe could Shipments to mass A high school fi xed-gear rider look- jewelry-like levels. Santa Fe is, aft er all, be happening across the nation, given retailers were down ing for pink deep-dish rims to person- the third largest art market in the na- the segmentation of the market into overall, close to 8 alize their ride, a 45-year-old looking tion. diff erent categories including urban percent, whereas to enter the big-hit world for the fi rst Bell, whose store has been open just suppliers to sporting time or a longtime cyclist looking for over a year, was joined by two other Continued on page 34 goods and bike shops saw business increase by the same amount. Bicycling Gains Traction in New Congress Bill Austin summed up supplier BY LYNETTE CARPIET email informing him that she decided confi dent that other meetings will have sales to bike dealers succinctly: “Units WASHINGTON, D.C.—Raleigh’s to co-sponsor the Bicycle Commuter an eff ect, too.” and dollars were up, as was the average Reed Pike knows fi rsthand that more Tax Benefi t Act. Andy Boyland, owner of three Cycle selling price. It was a good year for sup- lawmakers are willing to work with the “We had meetings with a number of Craft stores in New Jersey, agreed. “I pliers,” Austin said. Austin is Raleigh bicycle community to make cycling a representatives in the Washington dele- thought we got pretty good reception USA’s chairman and chief executive valid mode of transportation. gation and they all went very well,” said from all,” he said, adding that he had Just a day aft er meeting with Sen. Pike, Raleigh’s director of marketing, a challenging schedule covering meet- Continued on page 36 Maria Cantwell’s (D-WA) legislative who has attended the Summit on two ings with Congress members from New correspondent on Capitol Hill at the other occasions. “We’re particularly ex- York, New Jersey and Pennsylvania. Regional Shows National Bike Summit, Pike received an cited about this one success, but we’re Boyland, a fi rst-time attendee, met with Rep. Steven Rothman (D-NJ), who was pulled out of an appropria- Find Supporters tions meeting to greet his delegation. “Partly it was because he’s my wife’s Vary by Market cousin, so it was easy, but my delegation BY SEAN HONG was quite shocked when they paged NEW YORK, NY—Glen Goldstein, him,” he said. president of Bicycle Shows U.S., has “For me it was an eye-opening expe- seen little to improve his spirits since a rience. Th e League and Bikes Belong year ago, when he was forced to put his were fantastic in giving us information New York City Bicycle Show on hiatus and materials to be ready. Th ere’s no due to languid industry support. question I’ll be here next year.” Although he had hoped that his luck Heard Pike and Boyland’s sentiments were would change in 2007, Goldstein’s New echoed by many of the 435 attendees at York show remains dormant and to ex- on the this year’s Summit, March 14-16. In its acerbate matters, he has also retired his seventh year, the annual gathering set Boston show. attendance records. Industry participa- “I’m not holding my breath that the tion also was up, totaling 92; retailers shows will start up again in the future,” Photo by Jay Clark Hill The League organized Summit delegates by state, giving each group time accounted for 33 of that total. Goldstein said. “I’d like to, but I’m just to strategize and plan for their meetings with Congress members. Continued on page 50 watching at this point.” Goldstein chalks up the Boston On the Inside show’s demise to the same reason New Continued on page 32 Pacifi c Cycle feels domino ef- fect of Wal-Mart’s slugglish bike p9 business in its 2006 sales. The fi rst batch of Coasting bikes hits the market in Chicago at St. Patrick’s Day parade. p24 15 Years of Journalism for the Trade t a t s s duced 220,965 units domestically, Strong Sales to Continue. Darkening U.S. Market Stats which were shipped to other markets. economic indicators, which hit last If true, domestic bicycle production year, did little to dampen sales and Specialty Bike, Sports Chains… last year topped 400,000 units, which should have little eff ect this year. Continued from page one seems unlikely. For example, the “Media play on health and environ- 25,842 domestically produced bikes mental issues are already high and it offi cer and chair of the Bicycle Product another $1 billion or more to total bi- shipped to China under the Depart- is just going to increase,” said Pacifi c Suppliers Association’s (BPSA) statis- cycle market sales. ment of Commerce’s miscellaneous Cycle’s Frehner. tical committee. Rising energy, materials and fuel bike category had an average unit value “Bikes fi ght obesity and are sustain- On the other side of the aisle, Pacifi c prices had relatively little eff ect on of $55. Th ese Made in USA bikes were able, environmentally friendly trans- Cycle, the largest supplier of bikes in overall import unit value. Th e average $4 cheaper than the average Chinese portation at the same time. Even if the the United States, reported that its bike imported in 2006 cost $58.76, up a bike imported into the U.S. market. economy slows, this media message is sales into the mass market were down. modest 1.6 percent over 2005, and not Th e largest export markets for U.S.- increasing and will drive bike sales. If you factor out the increase in sales much off the 3 percent rise in whole- made bikes with wheel sizes over 25 We are in a great position as an indus- of Pacifi c swing sets and motor scoot- sale price reported by BPSA members. inches, which covers road and moun- try,” he said. ers last year, its bike sales were off close Import bike value has been rising tain bikes, are Canada, Japan and the Even reports of the end of the road Netherlands. Each received 18,621, bike boom, which swept through the “I’m confident that our mass side of the business 10,247, and 7,613 units, respectively. market last spring, are premature. Th e Netherlands received bikes aver- According to the BPSA, bike shops will rebound next year, and our IBD business is aging $1,034 each, followed by Japan sold 8 percent more road bikes last year growing strongly. So many dealers are looking for at $781 and Canada at $612. than in 2005. And everyone agrees that Which markets have the deepest the glut of carbon bikes on the market a big supplier who is not Trek and Specialized, pockets for Made in USA road and will lower prices, but little impact was and for them, we are a good fit.” —Jeff Frehner, mountain bikes? Guatemala received felt last year. bikes averaging $1,342 each, followed Orbea, the little Basque bike compa- chief executive officer of Pacific Cycle. by the UK at $1,137. ny no one had heard of fi ve years ago, Are Central American countries had strong carbon road sales last year to 8 percent, while sales to bike shops steadily since ’02, when the average experiencing a hot BMX market? Gua- and expects to continue growing sales. were up double digits. value bottomed out at $49.35. temala, Costa Rica and Honduras are “Pushing carbon technology like “I’m confi dent that our mass side Import numbers are down, but unit the second, third and fourth largest we did with the Orca and Diva is al- of the business will rebound next values for kids’ bikes are up—24-inch market for U.S.-made bikes with wheel ready bringing us sales faster than we year, and our IBD business is growing bikes jumped 11.3 percent, to $48.88 sizes less than 25 inches. Canada is its expected,” said Ronnie Points, Orbea strongly.